HSBC Holdings PLC (NYSE:HSBC) reported today its financial performance for Q3 2014, revealing that the bank has made provision of $378 million in anticipation of legal fines which may come out of the Forex manipulation investigation.
In addition to the forex investigation prohibition the global banking group has set aside a total of $1.7 billion for various legal and regulatory penalties it might face hurting its bottom line for the third-quarter of 2014. HSBC's results showed an underlying profit of $4.4 billion in Q3, a 12% drop from the previous quarter.
The share price of HSBC dropped following the announcement despite the fact that the forex provision was lower than the £400 million analysts expected. The sum was also the lowest provision announced so far by a major bank in relation to the forex investigation, compared for example, with Barclays' £500 million provision.
The forex manipulation investigations are ongoing worldwide, led by various criminal and regulatory bodies, but HSBC has indicated that the British Financial Conduct Authority (FCA) ) was the only authority it was in serious discussions with. Iain Mackay, HSBC finance director said: "At the moment the only detailed settlement discussions in which we are involved is with the FCA. There are a number of other jurisdictions that have expressed interest in this topic and we are working closely with authorities in each of those to work through those issues."
